Bombay High Court
Pr. Commissiioner Of Income Tax-1 vs Sushmita Holdings Limited on 3 May, 2024
Bench: K. R. Shriram, Neela Gokhale
2024:BHC-OS:7256-DB
Digitally
signed by
SHAMBHAVI
SHAMBHAVI NILESH
NILESH SHIVGAN 1/3 82-itxa-1498-2018.doc
SHIVGAN Date:
2024.05.06
11:27:35
+0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO.1498 OF 2018
Principal Commissioner of Income Tax -1 ...Appellant
Versus
Sushmita Holdings Limited ...Respondents
Mr. Suresh Kumar for Appellant.
None for Respondents.
CORAM: K. R. SHRIRAM &
DR. NEELA GOKHALE, JJ.
DATED: 3RD MAY 2024
PC:-
1. The following two substantial questions of law are proposed:
"a) "Whether on the facts and in the circumstances of the case
and in law, the Tribunal is correct in deleting the Order dated
10.05.2007 passed by the AO u/s. 271(1)(c) of the Act levying
penalty of Rs. 1,29,22,307/- and accordingly holding that penalty
is not leviable on the assessee for the year, u/s. 271(1)(c)?"
b) "Whether on the facts and in the circumstances of the case
and in law, the Tribunal was justified in not following its own
decision in the case of Earthmoving Equipment Service Corporation
in ITA No.6617/Mum/2014 dated 02.05.2017 wherein the Hon'ble
ITAT dismissed the legal ground raised by the assessee regarding
defect in notice u/s. 274 of the Act and held that penalty u/s.
271(1)(c) could not be deleted merely on the basis of defect in
notice u/s. 274 of the Act?"
2. The Assessing Officer ("AO") had imposed penalty under
Section 271(1)(c) of the Income Tax Act, 1961 ("the Act") and passed
penalty order dated 10th May 2017 on the charge of inaccurate
particulars of income in relation to disallowance of interest and
initiated penalty proceedings on the charge of concealment of
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particulars of income by invoking explanation 1 to Section 271(1)(c)
of the Act. It was the case of Assessee that penalty can not be levied
under Section 271(1)(c) of the Act on the charge which is different
than the charge initiated. The Income Tax Appellate Tribunal ("ITAT")
relying on a judgment of the Bombay High Court in CIT v. Samsun
Perinchery1 held that such an order can not be passed by the AO
imposing penalty. The Court had held that the AO should be clear as
to which of the two limbs under which penalty is imposable, has been
contravened or indicate that both have been contravened by initiating
penalty proceedings. The Court had held that it can not be that the
initiation would be only on one limb, i.e., for furnishing inaccurate
particulars of income while imposition of penalty on the other limb,
i.e., concealment of income.
3. The ITAT had also relied upon a judgment of the Apex Court in
CIT v. Reliance Petroproducts Pvt. Ltd.2 where the Court held that a
mere making of the claim, which is not sustainable in law by itself
will not amount to furnishing inaccurate particulars regarding the
income of the assessee. Such claim made in the return cannot amount
to the inaccurate particulars.
4. Therefore, in our view, the ITAT had correctly followed the law
laid down and passed the impugned order.
1. ITA No. 1154 of 2014 dated 05.11.2017.
2. [2010]322 ITR 158 (SC).
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5. No substantial question of law, therefore, arises. Appeal
dismissed.
(DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)
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